The world's top mobile phone maker Nokia has reported second-quarter profit just below market expectations, as rising shipments failed to offset the effect of fierce price competition from its rivals.
Its shares dropped by more than 7% on the news. The Finnish firm posted earnings per share of 18 cent, up from 15 cent a year ago but below the 19 cent expected by analysts, as sales rose 25% to €8.1 billion.
Nokia predicted third-quarter earnings per share of 14-17 cent on sales of €7.9-8.2 billion.
The company has returned to growth after a stagnant 2004, when gaps in its phone product portfolio forced it to cut prices. It has since added several new camera phones and slider models to the line-up, as well as cheaper handsets aimed at fast-growing emerging markets.
The mobile phone market had a brisk April-June quarter, with shipments at Nokia's closest rival Motorola up 40.6% year-on-year. Nokia has upgraded its estimate for mobile phone shipments this year by 20 million to 760 million, but it said much of this growth came from emerging markets, where there is intense competition and cheaper phones dominate the market.
